Search through our UKHotViews and UKHotViewExtra articles plus complete research reports
It’s been quite a week for TechMarketView. On Monday we launched our new research stream – PublicSectorViews. As a result we’ve had the best week for press comment in our history after we put out a release announcing that the Public sector was no longer the lifebuoy of the UK software and IT services market.
It all started with Nicholas Timmins in the Financial Times - Squeeze expected to curb growth of IT sector.
Other really interesting perspectives came from:
A big thankyou to our excellent PR team at Brands2Life for a top rate performance!For more details on how you can subscribe to PublicSectorViews, email prahah@techmarketview.com
Posted by Richard Holway at '08:11'
Just one year ago we launched the TechMarketView Foundation Service with our very first MarketViews report. Since then we have added IndustryViews, CompanyViews, OffshoreViews, as well as HotViewsExtra to the service we provide to our Foundation Service clients. Our HotViews archives (only available to Foundation Service clients) now contain over 2000 posts; making it an invaluable resource when researching a company or sector. We’ve signed up 50 of the leading suppliers of IT to the UK market (see Our Clients) and HotViews is now a ‘must read’ for over 10,000 readers every month. We've built a great team (see Our People) and TechMarketView now has considerable influence in the industry and media. We are, to say the least, very happy with our progress in such a short time and are delighted with the positive feedback we have had from our users.
But, not content with this, one year on, we are delighted to announce the launch today of TechMarketView’s latest research stream - PublicSectorViews - with the publication of our first in-depth report on the sector: UK Public Sector SITS Market Trends & Forecasts 2010.
You can read more about the main findings of the report in the post below and also in the excellent article by Nicholas Timmins in the Financial Times - Squeeze expected to curb growth of IT sector.
PublicSectorViews is a new add-on stream for our Foundation Service clients. All current Foundation service clients will receive PublicSectorViews free until the expiration of the annual contracts when it will be available as an optional, and extremely competitively priced, ‘extra’. In addition to a regular series of reports and analysis on the Public Sector and its various sub sectors and players, in the next month we are also introducing themed HotViews and HotViewsExtra emails with topics of special interest to PublicSectorViews subscribers.
PublicSectorViews is produced by our Research Directors – Tola Sargeant and Georgina O’Toole. Two of the most experienced and highly respected public sector IT analysts in the UK.
For all the detail behind the forecasts plus analysis of the trends shaping the UK public sector SITS sector, areas of opportunity in this challenging market and the keys to success for suppliers, TMV Foundation Service subscribers can download the report - UK Public Sector SITS Market Trends & Forecasts 2010 - from today.
If you’d like to learn more about this report and our new PublicSectorViews research service please contact Puni Rajah.
Posted by Richard Holway at '08:00'
This is a copy of our Press Release on the publication of UK Public Sector SITS Market Trends & Forecasts 2010
Main findings
Lifebuoy The public sector has been the lifebuoy of the UK software and IT services industries for the past decade, with public sector IT contracts exceeding £10.9 billion in 2009. But with cuts expected under both the existing Labour government or a potential Conservative one, the public sector IT boom is at an end. These are the predictions from TechMarketViews’ first report - UK Public Sector SITS Market Trends & Forecasts 2010 - in the newly launched PublicSectorViews research stream.
The report, UK Public Sector SITS Market Trends & Forecasts 2010, looks at two specific scenarios dependent on the outcome of the next general election, and predicts that compound annual growth for the UK public sector could range between 2.9% and 0.8% between 2009-2013. The former prediction (2.9%) being the base scenario which assumes a continuation of the status quo with a Labour Government. The latter, more likely scenario, assumes a Conservative Government wins the 2010 election and that tougher spending cuts are put in place after the general election.
2011/12 will begin to see the effect of more significant budget cuts as well as some uptick in outsourcing. By 2012/13, growth in outsourcing – notably in local government – will offset spending cuts in other areas such as consulting, systems integration and software, particularly in defence and central government
By Vertical Sector Health is forecast to be the strongest growing sector in both scenarios, followed by Education and local Government. Central Government, the Police and defence sectors will experience the lowest, or negative, growth. Budgets in these sectors are less protected than in health and education, which will still require some investment in IT even if large programmes such as the National Programme for IT in the NHS (NPfIT) and Building Schools for the Future (BSF) are scaled back. In local Government, growth in outsourcing is expected to be particularly strong, which will disguise the effect of budget cuts on other areas of the local and regional government software and IT services market.
Predicted Compound Annual Growth Rates under a Conservative Government (between 2009-2013), by sector
Source: TechMarketView
By Horizontal Sector When looking at the horizontal verticals within public sector IT, TechMarketView predicts that outsourcing will replace project services as the largest horizontal segment by 2013, with 58% of the market (up from 48% in 2009). Project services are set to decline to just 24% of the total public sector market by 2013 (down from a high of 30% in 2009). Fundamentally, measures to cut costs and gain efficiencies will be at the top of public sector agendas for the foreseeable future.
Research director, Tola Sargeant, says "Not all doom and gloom" “With a change of government expected later this year, IT suppliers to the public sector need to be prepared to adapt to new market conditions. The public sector has been the lifebuoy of UK IT for quite some time, so such a significant cut will have far-reaching consequences,” says Tola Sargeant, Research Director, TechMarketView.
“Cuts to IT spending could have a significant impact on the delivery of public services in some areas. The £12 billion National Programme for IT in the NHS (NPfIT) is a good example. The controversial programme is widely expected to be curtailed or reduced in scope whichever party wins the next election in a bid to reduce public spending. If this is not done sensibly then it will be patients and tax payers that suffer most. Patients, because IT systems have real benefits in terms of improved efficiency, reduced waiting times, reduced clinical risk and an improved patient experience. And tax payers because renegotiating contracts with existing suppliers and procuring alternative systems could be a very expensive and lengthy business.”
“However it’s not all doom and gloom, particularly if you’re in the outsourcing business, which is expected to be responsible for practically all the growth in the UK public sector over the next few years. Numerous high-profile data leaks within the public sector in recent years and the government’s commitment to make government ICT carbon neutral by 2012 will also make data security and sustainability key priorities over the next few years.”
Posted by Richard Holway at '07:58'
Although UK Public Sector SITS Market Trends & Forecasts 2010 is the first PublicSectorViews report to be produced by TechMarketView LLP, the ‘team’ has been analysing the UK SITS scene for several decades. Back in 1997, when Labour came to power, the public sector represented 21% of the UK SITS market. The private sector had actually been increasing its share of the market for most of the 1990s. Indeed, the added stimulus of the dotcom boom and the additional expenditure on the Y2K ‘bug’, actually meant that the public sector only represented 19% of the UK SITS market by 2000.
But then everything changed. The UK SITS sector entered three years of decline as the bubble burst. Private companies had brought forward spend pre-Y2K and now a combination of ‘Make Do and Mend’ and ‘More for Less’ (two of our dominant themes for the last decade) took over. But the initial restraints of the incoming Government went out of the window as they entered their second term. Grand projects were the order of the day. Public sector expenditure soared.
The UK SITS sector rubbed its hands with glee. I just cannot count the number of times that CEOs said to us “Thank goodness for the public sector!” during both private and public sessions. Growth rates in public sector SITS exceeded those in the private sector for every year in the last decade. The proportion of the market represented by the public sector grew from 19% to nearly 30% in ten years. The very best performing SITS companies were those with the highest exposure to the public sector. Indeed, we had grown very uneasy as some of the leaders in the UK SITS rankings made 50%+ of their revenues from the public sector.
But, as you will read in this report, all that is about to change. Whichever party forms the Government post the 2010 General Election, public sector SITS growth rates will fall. Indeed, fall below those from the private sector. Those companies that have complacently relied on the public sector are in for a rude shock. Even the contracts already let will be renewed for keener prices – and not necessarily with the incumbent supplier. The days of the mega IT contract are gone and every piece of new business, however small, will be the subject of intense competition. Even the days of “More for Less” are coming to an end. “Less for very much Less” might well become our new slogan.
Life in the private sector will not be easy either. Fasten your seatbelts and Drive carefully – the road ahead is rocky indeed.
Posted by Richard Holway at '07:56'
That’s how we’d best describe the stock performance of the now 125 UK-based software and IT services companies listed on the London Stock Exchange during 2009.
We brought you the headline figures earlier in the year (see Share Indices in Dec 09 and 2009 as a whole) but now you can also see how the UK IT services sector matched up with leading players in Continental Europe, US and India as well as against the ITSAs (IT staff agencies) and BPO players. The results may surprise you!
TechMarketView Foundation Service clients can download IndustryViews Quoted Sector-2009 Review from our website right now.
Posted by Anthony Miller at '06:00'
The results season is far from over, but we thought you'd like to see how the 2009 UK software and IT services (SITS) rankings are shaping up. We’ve taken our cues from company quarterly and half-yearly results and trading updates, and projected how we think the major players will have finished the year. We’ll be doing our usual full rankings update mid-year.
We expect little change in the UK Top 10 for 2009, with HP, IBM and Capita likely to retain their positions at the top of the ladder. A superb performance from Capgemini UK at the halfway stage leads us to push them up the rankings, displacing Microsoft in 4th spot, while Atos Origin UK nudges into the Top Ten also with expected double-digit growth.
We still expect to see four India-based players in the Top 25 (TCS, Infosys, Wipro and Tech Mahindra) despite all getting a bit of punishment from BT, a very significant client for all (and a major shareholder of Tech Mahindra, of course).
More, along with short views on the Top 25 players’ prospects, in our latest CompanyViews report on the TechMarketView website for Foundation Service clients to download right now!
Posted by Anthony Miller at '09:05'
Our emphasis, here at TechMarketView LLP, is on the UK and how developments and trends in technology affect players (of whatever origin) in the UK market. But we are still interested in the global scene too. And that's where our partner, PAC, comes in. PAC has just released its global forecast by vertical and makes the following comments.
ManufacturingThe economic crisis impacted the manufacturing sector most severely across the globe, particularly in the automotive, mechanical engineering, chemicals and metal sectors, while pharmaceuticals, food and aerospace & defense proved more resilient. For manufacturing companies, the focus in 2010 will clearly remain on short-term savings through consolidation and standardization of both assets and contracts and particularly on outsourcing contracts.
The recovery will not happen until the second half of this year and will be driven by investment in embedded systems, PLM - including integration with PDM, ERP and CRM - collaboration, MRO and CRM supporting after-sales services.
BankingThe situation in banking will remain highly differentiated from country-to-country, depending on the level of government aid and the structure of the industry, such as the importance of investment banking, private banking and semi-public saving banks. Banks will have several major issues to solve in 2010, with compliance continuing to generate the bulk of IT investments. Other issues include customer loyalty, post-merger integration, STP/ industrialization, data consolidation and processing, and these issues can only be solved through IT.
InsuranceInsurance companies are in a slightly better situation, as revenues (premiums) are quite stable. 2010 investments topics include multi-channel integration, CRM, web-based, front-end and legacy modernization.Public SectorThe public sector has been very resilient in most countries in 2009 as federal investment programs have supported demand; however municipalities and regional governments face decreasing tax income and most countries’ debt level will be a heavy burden for the years to come. PAC expects a progressive slowdown of growth in spending despite the implementation of new bookkeeping standards, regulations such as the European service rule and some hotly anticipated e-government projects. The biggest difference between the countries is that outsourcing is highly developed in countries like the UK or Australia, while countries like France, Eastern Europe and China are late adopters.TelecomsTelecom will continue to suffer from strong price pressure. Major IT in 2010 projects will include NGN (next generation networks) and the development of new (value added) services (mobile payments, web 2.0, content, etc.).
Utilities Utilities are both a traditionally resilient market and are benefiting from some industry-specific issues: liberalization, unbundling, information management, smart grid and smart metering. Similar to the public sector, outsourcing tendencies vary strongly between countries.RetailRetail will remain a very difficult market in most countries, especially in countries dominated by discounters. Discounters are well known to be both very economical and the toughest purchasers. On one hand, there should be interesting investment areas such as materials management, BI and multi-channel integration. On the other hand, the retail market might be hit hard by bankruptcies.Services and ConsumersServices and consumers is a very diverse industry and very much impacted by the crisis. Interesting investment areas will include multi-channeling and billing in media and process automation in professional services.
TransportTransport includes both logistics (strongly impacted) and passenger transportation (less affected, except airlines). Investment areas in 2010 should include fourth-and-fifth-party logistics and customer-oriented solutions such as ticketing, check-in, portals, and payments. PAC’s Chief Analyst, Christophe Châlons, remains cautious – as are we at TechMarketView – for the much anticipated recovery in 2010. “There are still important risks linked with unemployment, credit crunch and resulting bankruptcies. Even if volumes are expected to recover in the course of 2010, average prices and rates will be lower than in 2009, thus limiting market recovery," concludes Châlons.
TechMarketView would be delighted to supply you with more details on PAC’s products and services – in particular its European SITSI Research Programme. Contact prajah@techmarketview.com for more details.
Posted by Richard Holway at '16:19'
We are delighted to announce that Georgina O’Toole has joined TechMarketView as a Research Director. Many readers will know Georgina as a highly respected industry analyst for her commentary on the UK software and IT services market and for her in depth knowledge of public sector.. This is, however, something of a ‘reunion’. Firstly, before joining TechMarketView, Georgina and Tola Sargeant (who joined us last year) were the joint Practice Leaders for Ovum’s Geographies & Industries practice where she was responsible for Ovum’s government research globally. So reuniting them means TechmarketView now has about the strongest, most experienced and respected Public Sector team you could ever ask for. Secondly, Georgina was one of the original team at Ovum Holway which she joined in 2000. Here Georgina worked closely with both enterprise and vendor clients providing advice and opinion on the UK software and IT services market. She was instrumental in the launch of Ovum’s well-respected PublicSector@Ovum research programme in 2004 and went on to focus her research on the UK central government, defence and criminal justice markets. As a lead analyst in these sectors, Georgina’s opinion is valued by a variety of clients including IT services companies, major defence contractors and the UK Ministry of Defence. We are really delighted that Georgina has ‘rejoined’ the team.
View Georgina’s biography here
Posted by HotViews Editor at '06:02'
